A Pro Realty Service, LTD v. Fulton Bank, NA

J-A01037-19
NON-PRECEDENTIAL DECISION - SEE SUPERIOR COURT I.O.P. 65.37
A PRO REALTY SERVICE, LTD. : IN THE SUPERIOR COURT OF
T/D/B/A M&M REALTY PARTNERS, LP : PENNSYLVANIA
:
Appellant :
:
:
v. :
:
: No. 1961 EDA 2018
FULTON BANK, NA :
Appeal from the Order Entered June 21, 2018
In the Court of Common Pleas of Philadelphia County Civil Division at
No(s): 02424 July Term 2017
BEFORE: OTT, J., STABILE, J., and McLAUGHLIN, J.
MEMORANDUM BY McLAUGHLIN, J.: FILED MAY 14, 2019
A Pro Realty Service, LTD. T/D/B/A M&M Realty Partners, LP (“APR”)
sued Fulton Bank, NA (“Fulton”) demanding a statutory penalty of up to
$1,025,000 for the alleged failure to timely file a mortgage satisfaction piece.
The trial court granted Fulton’s motion for summary judgment and denied
APR’s motion. APR appealed, arguing that the trial court erred in not finding a
genuine issue of material fact regarding the payment of mortgage satisfaction
fees and in not distinguishing between two mortgages. It also claims the
“equities” ran against Fulton. We affirm.
The trial court aptly summarized the procedural history and facts of this
case as follows:
[APR] was the owner of a property located at 5820-5826 Mascher
Street, Philadelphia, PA 19120 (“the property”) until November
2016 when it was sold for $1.2 [m]illion. At the time of sale, the
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property was encumbered by two mortgages given to Fulton Bank
in exchange for loans of $400,000.00 in 2003 and $625,000[.00]
in 2009.
In the month leading up to the sale, [APR] requested a payoff
statement from Fulton Bank. The bank replied that as of
November 1, 2016, it required a payment of $88,762.94, plus a
per diem of $10.70, to satisfy the two mortgages. That payment
represented $81,063.20 in outstanding principal, $149.74
interest, and $7,550.00 in fees and costs.1
1 Fulton Bank subsequently agreed to waive the $7,550.00
in fees and costs after a dispute arose over whether they
were truly [APR’s] responsibility.
On November 23, 2016, [APR] sent Fulton Bank a payment of
$81,491.14 to satisfy the remaining balance of the two
mortgages. Then, on December 6, 2016, it delivered to Fulton
Bank a “NOTICE TO RECORD MORTGAGE SATISFACTION PIECE
TO AVOID PENALTY”. The notice reads, in pertinent part:
The party issuing this notice believes that the
mortgagee of the mortgage described below has
received full satisfaction and payment of all amounts
secured by the mortgage, including any applicable
satisfaction fee, . . . The party issuing this notice
hereby requests that the mortgagee issue and present
for recording a satisfaction piece concerning the
mortgage or provide a satisfactory reason why the
mortgage should not be satisfied to the party issuing
this notice. If you don’t comply with this notice, you
may be liable for penalties and costs in accordance
with the act of December 9, 2002 . . . known as the
Mortgage Satisfaction Act, . . .
Two days later, Fulton Bank wrote to [APR] with a reason why the
mortgage could not be satisfied - there were satisfaction fees still
outstanding in the amount of $340.50. While [APR] seems to
dispute whether this amount was truly owed, [APR’s] title
insurance company, Knights Abstract, Inc., delivered to [Fulton]
a check to pay those satisfaction fees on December 16, 2016.
[APR] has not provided any evidence suggesting it had already
paid the satisfaction fees as of December 8, 2016. Conversely, its
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own title insurance company admits the fees were owed, as the
letter that accompanied the $340.50 check began:
First, let me apologize for the late response, as I have
been out of the office for the past week with meetings
and closings. Enclosed herewith please find our check
in the amount of $340.50, representing the balance
due in order to satisfy the following mortgages:”
Unfortunately, [APR] did not re-issue a demand to Fulton Bank to
satisfy the mortgages after its title company paid the satisfaction
fees, and Fulton bank did not end up recording a mortgage
satisfaction piece until September 2017 – nine months after
[APR’s] initial demand. [APR] filed this lawsuit in July 2017 under
21 P.S. § 721-6, seeking up to $1,025,000.00 in damages for
[Fulton’s] nine-month delay in recording the mortgage satisfaction
statements.
Trial Court Opinion (“TCO”), filed 5/24/18, at 2-3 (citations omitted)
(emphasis in original).1 The parties filed cross-motions for summary
judgment. The court denied APR’s motion and granted Fulton’s motion.
APR appeals and asks us to review the following:
1. Did the trial court err as a matter of law in granting Fulton[’s]
Motion for Summary Judgment and not finding an issue of
disputed material fact regarding whether or not the mortgage
satisfaction fees were paid prior to the December 6, 2016
satisfaction demand letter?
2. Did the trial court err as a matter of law in not distinguishing
between the 2003 and 2009 mortgages when Fulton Bank had
____________________________________________
1 Instead of a Pa.R.A.P. 1925(a) opinion, the trial court relies on the opinion
it drafted after denying the motion for summary judgment.
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previously acknowledged the 2009 mortgage was paid in full
and “closed?”
3. Did the trial court err in finding the equities favored Fulton . . .
over [APR] when [APR] had substantially complied with the
requirements of the Mortgage Satisfaction Act?
APR’s Br. at 5.
PAYMENT OF SATISFACTION FEES
APR maintains that the trial court erred in granting the motion for
summary judgment because allegedly “there are still questions of material
fact regarding the question of if the mortgage satisfaction fees were paid prior
to the mailing of the December 6, 2016 letter.” APR’s Br. at 12.
We review the grant of a motion for summary judgment for an error of
law or abuse of discretion. Kozel v. Kozel, 97 A.3d 767, 772 (Pa.Super. 2014)
(citing Daley v. A.W. Chesteron, Inc., 37 A.3d 1175, 1179 (Pa. 2012)).
“When considering a motion for summary judgment, the trial court must take
all facts of record and reasonable inferences therefore from in a light most
favorable to the non-moving party.” Estate of Agnew v. Ross, 152 A.3d
247, 259 (Pa. 2017). Where there is no genuine issue of material fact and the
moving party is entitled to judgment as a matter of law, the trial court should
grant summary judgment. Id. Our standard of review is de novo and our scope
of review plenary. Id.
The Mortgage Satisfaction Act provides: “[a]fter the entire mortgage
obligation as well as all required satisfaction and recording costs have
been paid to the mortgagee, the mortgagor may send a notice to the
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mortgagee to present for recording a satisfaction piece to avoid damages.” 21
P.S. § 721-6(a) (emphasis added).
Here, APR maintains that “it must be inferred that the satisfaction costs
were in fact paid with the $81,491.14” based on the November 1 letter that
Fulton sent to APR setting forth a payoff amount. APR’s Br. at 14. It argues
that this letter was an admission by Fulton that APR did not owe the $340.55
and therefore its notice to Fulton was not premature. This argument, however,
asks us to only look at a portion of the record that was before the trial court,
which we will not do. The trial court reviewed both the November 1 letter and
the December 16 letter sent by Fulton to APR and the court explained that
summary judgment was appropriate because:
Under 21 P.S. § 721-6(d), a mortgagee can be held liable for up
to the full amount of the mortgage loan if it fails to record a
mortgage satisfaction piece within sixty (60) days of being
provided: 1) “payment of the entire mortgage obligation of all
required satisfaction and recording costs; and” 2)”the first written
request by the mortgagor for the satisfaction piece delivered and
in substantially the form described in this section.”
The statute specifically details the procedure a mortgagor must
follow in seeking damages. It provides a form notice that must be
used by the mortgagor, requires that the notice be sent “by
certified or registered mail”, and explicitly states that the notice
may be sent “[a]fter the entire mortgage obligation as well as all
required satisfaction and recording costs have been paid to the
mortgagee, . . . .”
Here, the undisputed record before the court shows that [APR]
sent [Fulton] the notice prescribed by 21 P.S. § 721-6(c) before
all required satisfaction costs were paid to [Fulton]. [APR’s] notice
was delivered on December 6, 2016, but the satisfaction fees were
not paid until December 16, 2016.
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TCO at 3-4 (emphasis in original, citations omitted).
We agree with the trial court’s conclusion. While the initial letter from
Fulton to APR stated that it would satisfy both mortgages after receiving the
stated amount, it was not an admission that APR did not to have to pay
satisfaction fees. Additionally, APR presented no evidence to support a finding
that it was not required to pay the fees, that Fulton incorrectly calculated the
fees, or that it had paid the fees before it sent the satisfaction notice. The only
evidence presented supports a finding that APR still owed the fees. The trial
court did not abuse its discretion in granting summary judgment in favor of
Fulton.
2003 VS. 2009 MORTGAGES
Next, APR claims that the trial court “erred when it failed to distinguish
the 2009 Mortgage from the 2003 Mortgage.” APR’s Br. at 14. It maintains
that this failure creates “a clear question of material fact as to whether the
satisfaction fees from the 2009 mortgage were still outstanding at the time of
the December 6, 2016 demand letter.” Id. at 15. We conclude that this claim
lacks merit. As referenced above, the title insurance company’s cover letter
tendering payment of the outstanding $340.50 stated the fees applied to both
mortgages:
Enclosed herewith please find our check in the amount of $340.50,
representing the balance due in order to satisfy the following
mortgages:
$400,000 Premier Bank to M&M Realty Partners, LP dated
10/20/2003 recorded 11/07/2003, Document No. 5080067
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$625,000 Fulton Bank, N.A. to M&M Realty Partners, LP dated
8/27/2009, recorded 9/9/2009 Document 52116014.
See Opposition to Summary Judgment at Exhibit I. In addition, Fulton’s initial
letter referenced both mortgages. Thus, the evidence supported a finding that
the outstanding fees applied to both mortgages. There was no evidence to the
contrary, such that any failure to distinguish between the two mortgages was
not error. No relief is due.
“SUBSTANTIAL COMPLIANCE” WITH MORTGAGE SATISFACTION ACT
Next, APR argues that because it substantially complied with Section
721-6(a), the trial court should have denied summary judgment. This claim is
waived because APR failed to raise this issue with the trial court. See Pa.R.A.P.
302(a) (“Issues not raised in lower court are waived and cannot be raised for
the first time on appeal”).
Even if APR had preserved this issue for appellate review, we would
conclude that it lacked merit. “Under the doctrine of substantial compliance,
the trial court may ‘overlook any procedural defect that does not prejudice a
party’s rights.’” See Green Acres Rehabilitation and Nursing Center v.
Sullivan, 113 A.3d 1261, 1272 (Pa.Super. 2015) (quoting Womer v.
Hilliker, 908 A.2d 269, 276 (Pa. 2006)). Rule 126 of the Pennsylvania Rules
of Civil Procedure “incorporates the doctrine of substantial compliance” and in
relevant part provides that: “[t]he court at every stage of any such action or
proceeding may disregard any error or defect of procedure which does not
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affect the substantial rights of the parties.” Pa.R.C.P. 126 (emphasis added).
The doctrine refers to a liberal construction of the Rules of Civil Procedure.
See Green Acres Rehabilitation and Nursing Center, 113 A.3d at 1272.
Here, APR argues that it substantially complied with the Mortgage Satisfaction
Act, not the Rules of Civil Procedure. Thus, the doctrine does not apply. The
argument is meritless and no relief is due.
EQUITIES FAVORED FULTON BANK
For its final argument, APR claims that the trial court “erred when it
found that the equities favored Fulton Bank.” APR’s Br. at 15. This claim is
waived as well because APR did not raise it with the trial court. See In re F.C.
III, 2 A.3d 1201, 1211 (Pa. 2010) (“Issue preservation is foundational to
proper appellate review.”). We therefore affirm the entry of summary
judgment in Fulton’s favor and against APR.
Order affirmed.
Judge Stabile joins the memorandum.
Judge Ott concurs in the result.
Judgment Entered.
Joseph D. Seletyn, Esq.
Prothonotary
Date: 5/14/19
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